Capital Realm Financial Holdings Group (HKG:204) hikes 44% this week, taking three-year gains to 10%

Over the last month the Capital Realm Financial Holdings Group Limited (HKG:204) has been much stronger than before, rebounding by 121%.

While the stock has risen 44% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

View our latest analysis for Capital Realm Financial Holdings Group

Because Capital Realm Financial Holdings Group made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last three years, Capital Realm Financial Holdings Group saw its revenue grow by 101% per year, compound. That is faster than most pre-profit companies. The share price drop of 7% per year over three years would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth. It seems likely that actual growth fell short of shareholders' expectations. Still, with high hopes now tempered, now might prove to be an opportunity to buy.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Capital Realm Financial Holdings Group's total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. We note that Capital Realm Financial Holdings Group's TSR, at 10% is higher than its share price return of -23%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.

A Different Perspective

Pleasingly, Capital Realm Financial Holdings Group's total shareholder return last year was 51%. That gain actually surpasses the 3% TSR it generated (per year) over three years. Given the track record of solid returns over varying time frames, it might be worth putting Capital Realm Financial Holdings Group on your watchlist. It's always interesting to track share price performance over the longer term. But to understand Capital Realm Financial Holdings Group better, we need to consider many other factors. Case in point: We've spotted 5 warning signs for Capital Realm Financial Holdings Group you should be aware of, and 1 of them is concerning.

Capital Realm Financial Holdings Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.